Perpetual Resources : Beharra White Sand Update

ASX RELEASE

31st March 2022 ASX:PEC

----------------------

CORPORATE DIRECTORY

Executive Chairman Julian Babarczy

Managing Director Robert Benussi

Non-Executive Director Brett Grosvenor

Company Secretary Nicholas Katris

----------------------

PROJECTS

Beharra Silica Sands Arrowsmith West Sargon Hub Eneabba Hub ----------------------

CONTACT

223 Liverpool Street

Darlinghurst NSW 2010

Robert Benussi [phone]

We wish to acknowledge the Traditional Custodians of the land (Yamatji Southern Regional) on which we are developing the Beharra Project, and pay our respects to their Elders past, present and emerging.

Desktop Analysis of Beharra Drilling Data Suggests Significant Impurity Reductions

Possible

HIGHLIGHTS:

• • Desktop analysis of Beharra white sand only geochemistry data suggests the upper white horizon contains lower impurities and higher SiO2 content, excluding titanium oxide.

• • Recently announced bulk metallurgical program aims to demonstrate the differing chemical composition of the various identified sub-domains, with a plan to focus development on the highest quality horizon.

• • Perpetual is strategically targeting a low iron silica sand end product, focused on the high growth and high value ultra-clear PV solar cell cover glass markets in Asia.

Perpetual Resources Limited (ASX: PEC, "PEC", "Perpetual" or "the Company") is pleased to provide an update on internal desktop and statistical analysis that it has been undertaken to better understand the positive implications of the recent white sand only drilling results. Perpetual considers that there is potential for Beharra to host a very low impurity white sand sub-domain (as a sub-set of the identified white sand horizon). The potential for a very low impurity sub-domain presents an opportunity to focus development of the Beharra orebody on end sand product quality that can address the high growth Asian PV solar cell cover glass markets.

Mr. Julian Babarczy, Executive Chairman of Perpetual, commented, "Our understanding of the Beharra orebody has advanced significantly since we announced initial metallurgical results that were used in the Beharra PFS in March 2021. We have confirmed material reductions in the impurity profile at Beharra by focusing initially on the white sand horizon and now we have likely identified a thick sub-domain of premium white sand in the upper part of the identified white zone horizon. Our analysis is extremely encouraging, and we eagerly await results of the bulk metallurgical test work which is currently in process. We are targeting an iron content of close to 100ppm at Beharra, and believe the current testing has a strong chance of delivering our target results".

Background to Potential Sub-Domains within Beharra Orebody

Yellow	12	2%	99.15	0.08	0.22	0.30
White Upper	305	54%	99.04	0.13	0.28	0.19
White Lower	244	43%	98.30	0.21	0.61	0.24
TOTAL	561	98.72	0.16	0.42	0.21
Change	1.3%	-18.1%	-65.4%	-54.4%

Beharra Sub-Domains

Number of samples

Proportion

SiO2 %

Fe2O3 %

AL2O3 %

LOI %

Results of the Beharra white sand only 86-hole air core drilling program were announced to the market in August 2021 (please refer to announcement dated 30th August 2021 titled,"Phase 3 Air Core InfillDrilling Results - Beharra").

Analysis of the drill results revealed that the impurity profile within the Beharra white sand sequence demonstrated distinct geological sub-domains, with potential for chemical and lithological/mineralogical zonation between an upper and lower sub-unit. The upper unit appeared to contain a higher SiO2 content and a lower impurity profile.

Beharra Sub-Domains

Number of samples

Proportion

SiO2 %

Fe2O3 %

AL2O3 %

LOI %

Yellow	12	2%	99.15	0.08	0.22	0.30
White Upper	305	42%	99.04	0.13	0.28	0.19
White Lower	244	34%	98.30	0.21	0.61	0.24
Grey Pod	1	0%	98.80	0.18	0.28	0.29
Grey	159	22%	93.10	0.33	4.05	1.35
Total	721	100%	97.48	0.2	1.22	0.47

Note: Table is indicative only, with all calculations based on an arithmetic average of included drill holes only

Figure 1 - Indicative analysis of the samples that were selected to comprise the bulk sample in the most recent metallurgical test work at Beharra

If the Grey Pod/Grey sub domains are excluded from the data set (as has been undertaken in analysis in Figure 2 below), we can see a clear increase in in-situ SiO2 values and a significant reduction in in-situ Fe2O3 and Al2O3 levels (reductions of 18% and 65% respectively).

Figure 2 - Analysis showing impact of removal of Grey Pod/Grey sub-domains and the potential impact on in-situ SiO2 grades and the potential reduction in key impurities

What is clear from this analysis is that the inclusion of the Grey/Grey Pod sub domain was likely a significant contributor to overall Fe2O3 and Al2O3 content in the final bulk sample (results of which were announced in December 2021). Despite the inclusion of the Grey/Grey Pod (which likely skewed the impurity profile materially higher), the results still delivered a compelling end product, with final end product specifications showing a reduction of 40% in the key impurity profile of Fe2O3 (to 173ppm from 276ppm) when compared to the bulk metallurgical test work conducted as part of Perpetual's Beharra PFS study (for additional information, please see ASX announcement dated 29th January 2021, titled,"Exceptional Metallurgical Test Results - Beharra")

Beharra White Sand Only	SiO2	Mass
Beharra Special White	99.6%	173	1986	342	100%
Beharra Premium White Coarse	99.6%	160	1620	290	14%
Beharra Premium White Fine	99.6%	175	2045	350	86%

Fe2O3 ppm Al2O3 ppm TiO2 ppm

Figure 3 - Results of December 2021 bulk metallurgical test work which targeted the white sand only horizon at Beharra

Inclusion of the grey horizon(s) introduced an elevated level of feldspar to the bulk sample which cannot readily be removed using the proposed metallurgical stages. This contributed to higher levels of Al2O3 and K2O and commensurately lower SiO2 grade in the bulk sample results.

This analysis of the drill results assisted in the identification of varying sub-domains within the Beharra orebody, demonstrated schematically in Figure 4 below at one interpreted cross section.

Figure 4 - Cross Section C022-C025 showing interpreted domains within the Beharra white sand sequence, and the composites used for the metallurgical testing as reported herein The focus of the current bulk sampling and testing program has been to extract bulk representative

samples from each of the identified sub-domains. These include;

• • Yellow sand horizon (Y),

• • Upper White sand horizon (UW),

• • Lower White sand horizon (LW),

• • Grey Sand horizon above the water table (GA), and

• • Grey Sand horizon below the water table (GB)

The aim of testing these separate sand horizons (sub domains), is to accurately determine whether selective mining and processing of these sub domains could deliver distinct and consistent end product characteristics, ideally with one horizon (currently thought to be the Upper White horizon) containing a very low impurity profile. This may position Beharra end product as a premium low iron silica sand that could target the fast-growing ultra-clear glass, including PV solar cell, markets in Asia.

Perpetual has also undertaken additional desktop statistical analysis of the Phase 3 air core drilling results (announced in August 2021), with the following observations.

Note: Al2O3 values are shown as one-tenth of actual values

Figure 5 - Average values of impurities within geological domains at Beharra

Note: Al2O3 values shown as one-half actual values

Figure 6 - Average per meter impurity levels for all 86-drill holes

What is apparent from this analysis is that the Upper White and Lower White sub-domains appear lowest in impurities (see Figure 5), which also correlates with the average of all impurities as measured by meter interval across all 86 drill holes (see Figure 6). This analysis suggests potentially that the upper white and/or the top 5-6 meters of the Beharra orebody should have a materially lower impurity profile than the deeper horizons of the orebody.

If this thesis is confirmed by the upcoming results from the bulk metallurgical test work (currently anticipated received in 2QCY22), then a production scenario targeting the upper section of the Beharra white sand horizon may yield a compelling end product profile that has potential to enhance overall project economics and demand for the apparent high purity products from the Beharra project.

About Perpetual Resources Limited